Select Sands delivered proppant by barge starting in Q4
Select Sands Corp. (ticker: SNS) reported full-year revenues of $15.1 million, with a gross profit of $2.9 million. However, the company had a full-year net loss of $1.6 million, or $(0.02) per basic and diluted common share. For Q4 2017, Select reported a net income of $1.3 million, or $0.01 per basic and diluted common share.
- In 2017 the company entered into a multi-year frac sand supply agreement with an oilfield services provider, with commitments lasting through 2019. Initial rail shipments began in Q1 2017
- In November 2017, the company began barging frac sand – Select said it expects that this will remain an “important mode of delivery” moving forward
- The company reduced transportation costs by building a private road from its Sandtown mining operations to a main highway (cutting down mileage)
- Select sold frac sand volumes of 300,000~ tons during 2017
An ocean of sand
The company has made improvements to its Sandtown mining operations in Arkansas, USA. Select’s facilities can now produce up to 600,000 tons per year. The company said it optimized processes to reduce waste and upgraded pumps/piping to increase throughput.
President and CEO Zig Vitols commented, “Given that we only began commercial production at the start of last year, I am very pleased with the progress we made throughout 2017, both operationally and financially. Significant accomplishments were made on several fronts to get us to where we can now produce at the facilities’ current design run rate of 600,000 tons per year…
“While our fourth quarter financial results included certain items that impacted comparisons to the third quarter, during the period we materially improved our delivery flexibility through the addition of barging and began construction of a direct access road to reduce the number of miles driven to reach the recently rebuilt multi-lane highway. I am happy to report that the construction of our road was recently completed, and we are already seeing the benefits in our cost structure,” Vitols concluded.
For Q1 2018, the company expects frac and industrial sales volumes of approximately 92,000 tons. For Q2 2018, Select expects sales volumes of 120,000 tons to 140,000 tons.
Even more sand – 400,000 tons
In Q4 2017, Select Sands entered into an agreement to purchase 223 acres of property in Independence County, Arkansas. On the property, the company plans to immediately build a new stand-alone 400,000 ton per annum production facility, comprising of both wet and dry processing capability. Completion is projected to be in the second half of 2018.
The project will cost approximately $4.0 million to $4.5 million and the company said it anticipates funding the construction through bank financing. The expansion should reduce production costs, primarily through interplant transport savings.
